What is a non-exempt employee?
A non-exempt employee is a worker who is entitled to overtime pay and minimum wage protections under the Fair Labor Standards Act (FLSA). These employees must be paid at least the federal or state minimum wage and receive overtime pay at 1.5 times their regular hourly rate for any hours worked beyond 40 per week.
For businesses using Homebase payroll, correctly classifying employees as non-exempt helps ensure compliance with wage and hour laws, preventing legal issues and payroll errors.
Differences between non-exempt and exempt employees
The main differences between non-exempt and exempt employees include:
Who qualifies as a non-exempt employee
Most hourly employees are classified as non-exempt. To qualify, employees must:
- Earn below the FLSA salary threshold ($684 per week or $35,568 per year as of 2024)
- Perform non-exempt job duties like customer service, manual labor, or administrative support
- Be paid hourly or have a salary below the exempt threshold
Employees who do not meet exemption criteria must be classified as non-exempt and receive overtime pay when applicable.
Legal requirements for non-exempt employees
Employers must:
- Pay at least the federal or state minimum wage (whichever is higher)
- Track hours worked accurately, including overtime
- Pay overtime at 1.5 times the employee’s regular rate for any hours over 40 per week
- Provide meal and rest breaks as required by state law
Failure to comply with FLSA regulations can lead to wage disputes, penalties, and lawsuits.
Payroll for non-exempt employees
Non-exempt employees are typically paid hourly, meaning payroll must account for:
- Regular wages based on hours worked
- Overtime pay calculations for work beyond 40 hours per week
- Shift differentials or bonuses (if applicable)
- Deductions for taxes and benefits
Homebase payroll automates time tracking, overtime calculations, and tax withholdings to help businesses ensure payroll accuracy and compliance.
Try Homebase payroll today to simplify payroll processing for non-exempt employees.
How Homebase helps businesses manage non-exempt employees
Tracking hours and processing payroll for non-exempt employees can be complex, but Homebase makes it easy by:
- Automating wage and overtime calculations
- Tracking hours worked in real time with time clock integration
- Ensuring compliance with federal and state wage laws
- Generating payroll reports for tax filing and record-keeping
Sign up for Homebase today to simplify payroll and labor law compliance for non-exempt employees.
Related articles
- Exempt & Nonexempt Employees: What the Difference is & How to Classify Them
- 5 Common Wage & Hour Mistakes Every Employer Should Avoid
- Time clock rules for hourly employees